The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the 2026 Fee Schedule, which brings several updates to physician payment rates and policies.
The conversion factor, a key element in determining physician payments, will see an increase due to budget neutrality adjustments, an efficiency adjustment, and a one-year 2.5% update approved by Congress to address inflation. Physicians who do not participate in an advanced alternative payment model (A-APM) will see their conversion factor rise from $32.34 to $33.40. For those participating in an A-APM, the rate increases to $33.56.
Policy groups have increasingly called for more substantial and consistent changes to the conversion factor to support the Medicare program’s long-term health. The American Medical Association (AMA) commented: “In their June 2025 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) expressed concerns about the growing gap between physicians’ input costs and Medicare payment, warning: ‘[t]his larger gap could create incentives for clinicians to reduce the number of Medicare beneficiaries they treat, stop participating in Medicare entirely, or vertically consolidate with hospitals, which could increase spending for beneficiaries and the Medicare program.’”
MedPAC has recommended that Congress repeal current law updates and instead adopt annual increases tied to the Medicare Economic Index (MEI). Similarly, the 2025 Medicare Trustees Report warned that without changes under current law, “the Trustees expect access to Medicare-participating physicians to become a significant issue in the long term.”
According to officials at Florida Medical Association (FMA), advocacy efforts will continue on behalf of increasing physician payments within Medicare.
Regarding telehealth services, ongoing federal government shutdowns have resulted in many telehealth flexibilities expiring except for patients dealing with mental health or substance abuse disorders. While CMS cannot resolve this through its own rulemaking authority, it has removed frequency limits on telehealth provided in hospitals and skilled nursing facilities and permanently allowed virtual direct supervision for most supervised services.
For the Merit-based Incentive Payment System (MIPS), FMA continues its call for repealing payment penalties associated with MIPS since there is no evidence these penalties help improve patient care. CMS did not raise the performance threshold required to avoid MIPS penalties in Performance Year 2026; as a result, fewer physicians are expected to be penalized when those results apply in 2028.
Additional resources are available from CMS including its press release as well as fact sheets on both Physician Payment Schedule and the Medicare Shared Savings Program.
